New Zealand NBR rich lister Neville Crichton is suing some of Australia's wealthiest coal barons and two of its most high-profile stockbrokers for ''misleading and deceptive conduct'' over millions of dollars secretly funnelled to the family of the Australian Labor Party (ALP) powerbroker Eddie Obeid.

Sydney-based Crichton has filed a writ in the Federal Court in Sydney alleging that nearly A$5m (NZ$6.2m) he paid for shares in Cascade Coal - the coalmining company now at the heart of Australia's most explosive corruption inquiry in decades - was instead directed elsewhere.

Crichton's Ateco Automotive NZ Pty invested almost A$5m into the scheme, and his co-plaintiff's Denis O'Neil's company put in nearly A$8m.

Evidence heard at the Independent Commission Against Corruption suggests this money has gone to the Obeid family.

Crichton, worth $175m according to the National Business Review, made his money in the motoring trade and owns the Australasian distribution rights for Ferrari.

The lawsuit blames 16 individuals and companies, including the Obeid family itself, prominent stockbrokers Brent Potts and Peter Gray, who assisted in the share purchase in November 2010, as well as Travers Duncan, John McGuigan, John Atkinson, John Kinghorn and Richard Poole, the five men who were running Cascade Coal.

Duncan made more than A$500m in 2009 when he sold another mining interest to a Chinese company, and Kinghorn made A$500m in a controversial float of Rams Home Loans in 2007.

Since November, the ICAC has heard evidence that inside information was allegedly used to corrupt a coal tender run by former minister Ian Macdonald to benefit Cascade Coal, which won the tender, and the Obeid family, which took a secret 25 per cent share of the company.

Even though Cascade had been valued at A$25m, the plan was for the company to then be acquired by the publicly-listed White Energy for A$500m, reaping massive profits for all involved. All five of the Cascade directors were also directors of White Energy. However the plan went awry after an independent White Energy director, Graham Cubbin, and the stock exchange began probing the transaction.

Cascade's solution was to rid itself of the Obeids' secret shareholding, agreeing to pay them A$60m - half of which is yet to be paid. The inquiry has heard that the Obeids still have a 9.3 per cent interest in Cascade Coal.

Now, O'Neil and Crichton have alleged that the A$A13 million they invested was used not to take up shares in Cascade, but to instead pay out a third party, and it follows evidence heard at the ICAC of a complex web of companies used to hide this transaction because its ultimate beneficiary was the Obeid family.

One of the lawsuit's respondents is Southeast Investment Group Pty Ltd, a company run by Sevag Chalabian, a solicitor retained by the Obeids to hide their interest in the transaction.

O'Neil and Crichton say they were told the capital raising that enabled them to buy into the company was to be used to ''reduce third party debt and creditors'', and that in return their respective companies would be allotted shares via a nominee company.

But in what they have described in court documents as a ''breach of trust'', this money was instead transferred to Amanda Poole, the wife of Cascade director Richard Poole, and to Chalabian, ''for those monies to be paid from Southeast to entities and/or persons whose identity [they] are currently unable to ascertain''.